FRANCE: ITALY-Macron Hosts Italian Pres. Amid Relations Push
Jun-07 08:51
Italian President Sergio Mattarella visits Paris today for lunch and talks with his French counterpart Emmanuel Macron as the French leader seeks to smooth ties with the Italian gov't after months of fraught relations. While Matterella is a political independent and the office of the presidency is largely ceremonial, Macron is seen as keen to hold positive talks with the Italian head of state in an effort to improve the mood between Macron's gov't and that of Italian PM Giorgia Meloni.
- Earlier, Politico reported that Macron was concerned that the popularity of Meloni's national conservative Brothers of Italy (FdI) party could legitimise the far-right National Rally of Macron's adversary Marine Le Pen ahead of the 2024 European Parliament elections.
- Franco-Italian relations remain poor due to Meloni's hard line on illegal migration that saw Italian authorities direct a migrant rescue vessel to France in Nov 2022, and Foreign Minister Antonio Tajani cancel a visit to Paris after French Interior Minister Gerald Darmanin said that the Italian gov't is "incapable" of managing migration.
- Meloni's FdI sits within the eurosceptic European Conservatives and Reformists (ECR) group in the EP, but there has been speculation that the centre-right European People's Party (EPP) group could seek to work with the FdI (expected to win a plurality of Italy's EP seats in 2024). This could reduce the influence of the liberal Renew Europe group in which Macron's Renaissance party sits.
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EQUITIES: Energy and Banks lead gains
May-08 08:09
- Stoxx600 sees Energy and Banks as the leading stocks, Risk On, the driver for the push lower in Govie futures, but low volumes help exacerbate the moves, with Bund extending through new lows, now at 135.52.
Decent Swap related Schatz trade, suggest payer in swap:
- DUM3 11.15k at 105.825.
BUNDS: Matching Friday's lows
May-08 07:54
- Still no new drivers further to the bullet posted at 8:25BST, but worth noting that Bund futures have almost matched Friday's low of 135.67 at writing.
- Focus remains on the 135.62 low from Thursday. Below there is initial firm support at 135.34, the 20-day EMA.
CROSS ASSET: Equities push to session highs
May-08 07:25
- The Bounce in Risk, Equities at session high, keep the lid on the USD, and the Aussie test new high versus the EUR, USD, JPY.
- The price action in risk provides some selling interest in Bonds, TYM3 sold in 3k, while EGBs drift to session low.
- Support in Bund is still at 135.62.
